Dec 2, 2008

India - Under pressure to settle Barh dispute

Sujay Mehdudia

NEW DELHI: India has come under tremendous pressure from Russia for settling the “dispute” between state-run National Thermal Power Corporation (NTPC) and Russian company Techno Promo Exports (TPE) over the execution of the country’s first super critical 1980 MW Barh power project before the commencement of Russian President Dimity Mededev’s visit to India beginning December 4.

In a related development, the adjudicator in the dispute between NTPC and TPE, Justice (retd.) Anil Dev Singh, submitted his report on November 28.

Indications are that Mr. Justice Singh has upheld the NTPC’s viewpoint in the case. Interestingly, the urgency to settle the dispute was conveyed to Petroleum and Natural Gas Minister Murli Deora by Russian Prime Minister Vladimir Putin during the Minister’s visit to Moscow last month.

No penalty

Sources said that Mr. Putin had reportedly told Mr. Deora that the NTPC should settle the dispute without any penalty issue in order to open avenues for the Indian companies to get oil contracts in Russia.

Following this, Union Power Minister Sushil Kumar Shinde held a meeting with senior NTPC and Power Ministry officials in the presence of Mr. Deora to find a solution to the issue.

However, it is learnt that NTPC had expressed its inability to work out a solution without invoking the contractual obligations on the ground that it would have to incur a loss of around Rs.800 crore in the process.

The NTPC had placed an order worth Rs.2,066 crore for steam generators with the TPE in March 2005.

However, the company failed to fulfil its contractual obligations and the entire matter got entangled in allegations of kickbacks leading to a CBI investigation which is still going on.

“Even Mr. Shinde had told the NTPC top management to take a fair view on the issue after hearing their side of the story. The NTPC will incur heavy losses and the entire process will have to once again be taken up at various levels in the organisation. We are under pressure to settle the dispute before Mr. Mededev’s visit to India but it almost looks impossible till a solution is found on who will bear the Rs.800 crore estimated losses,” a senior Ministry official said.

Asked for his view, Minister of State for Power Jairam Ramesh said the financial implications for the NTPC were immense and it was not a small matter and a holistic view of the entire situation had to be taken keeping in mind the NTPC’s interest.

No comments: